• Streamline and simplify the E-rate application process and overall program administration

The Order maintains E-rate’s current budget of $2.4 billion (adjusted by inflation) and makes available an additional $2 billion to support Wi-Fi over the next two years through improved financial management practices that free up excess reserves. For the following three years, the program will target $1 billion annually to Wi-Fi – while continuing to ensure funding is available for broadband connectivity to schools and libraries – by phasing out support for non-broadband services, such as pagers and phones, and through increased efficiencies.

In total, the program improvements will target an additional $5 billion for Wi-Fi over the next five years, which is sufficient to expand Wi-Fi networks in all schools and libraries. The effort will potentially provide a 75 percent increase in Wi-Fi funding for rural schools over the next five years and a 60 percent increase for urban schools, delivering Wi-Fi to an additional 10 million students in 2015 alone.

Today’s action represents the next step in an ongoing E-rate modernization process. Issues that the Commission previously sought comment on remain open, and the Further Notice accompanying today’s order seeks comment on a series of additional issues, including the appropriate long-term funding necessary to meet the goals established in the Order.

Action by the Commission, July 11, 2014, by Report and Orderand Further Notice of Proposed Rulemaking (FCC 14-99). Chairman Wheeler, Commissioner Clyburn, with Commissioner Rosenworcel concurring in part, and Commissioners Pai and O’Rielly dissenting.

The move will phase out funding under a program known as E-rate for old technologies like pagers and dial-up phone service in order to subsidize broadband and wireless Internet connections in classrooms and libraries.

It doesn’t seek to increase rates paid by customers of telecommunications services or the program’s $2.4 billion annual budget cap, even though at least one Republican commissioner fears that’s what will eventually happen.

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“The FCC has forfeited this opportunity for real, bipartisan reform of the E-rate program,” [FCC Commissioner Ajit] Pai said at the meeting today. “In five months, maybe six, we’ll be back at this table to talk about how much to raise” U.S. consumer phone bills.

With a last-minute tweak to his proposal, Wheeler secured votes from the two Democratic commissioners, Jessica Rosenworcel and Mignon Clyburn, to pass the first major update to E-Rate since it was created in 1997.

The final proposal includes a “safety valve” that aims to guarantee that investment in Wi-Fi does take priority over broadband connectivity, one of the primary concerns from both sides of the aisle in the week leading up to the vote.

But Rosenworcel, one of E-Rate’s biggest champions, and numerous Democrat lawmakers say that increasing E-Rate’s budget is a necessary step toward reaching President Obama’s goal of connecting 99 percent of U.S. students to high-speed Internet by 2015.

“There is nothing radical about [raising the cap],” Rosenworcel said Friday at the open commission meeting. “I hope that going forward we will have the courage to fix this.”

Mr. Wheeler’s original plan focused more on funding internal Wi-Fi networks within schools, an area previously neglected by E-Rate funding. Mr. Wheeler said he has seen firsthand how modern teaching strategies require giving students Internet access at their desks.

However, Mr. Wheeler was forced to change his proposal late Thursday to ensure support of Democratic commissioners Jessica Rosenworcel and Mignon Clyburn. Ms. Rosenworcel was particularly concerned that the emphasis on Wi-Fi would detract from schools’ need for faster Internet access. To address her concern, the final proposal clarifies that funding requests for external broadband connections would take priority over requests for internal Wi-Fi networks.

“I am mindful that any efforts to make Wi-Fi more broadly available cannot come at the expense of E-Rate funding that keeps schools and libraries connected to basic broadband,” Ms. Rosenworcel said.

The program’s formula for allocating funds to schools and libraries based on the number of students or the physical size of the library also raised concern from commissioners on both sides of the aisle. Ms. Clyburn pushed for changes to ensure schools and libraries in higher poverty areas would have access to more funding.

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Reaction and Commentary

Today, the Federal Communications Commission (FCC) voted to release the first Order as part of its E-rate modernization proceeding. American Library Association (ALA) President Courtney Young released the following statement:

“This Order represents a solid first step toward increasing library participation in the E-rate program and moving our communities toward the gigabit speeds increasingly needed to support Wi-Fi, digital learning and multimedia collections. More than a year of hard work and advocacy on behalf of our nation’s 16,400 public libraries and the communities they serve has brought us to this point, and I’m proud of what ALA and its library and school partners have achieved.

We are pleased the Commission is addressing the long-term shortfall of funding for Wi-Fi and internal connections, and that support will be available for more libraries to meet demands for mobile access and services. Nearly all public libraries now offer free public Wi-Fi access, and usage is growing dramatically—from our largest city libraries to the rural libraries that often remain the only free public internet access point in the area. Our nation’s public libraries depend on affordable, scalable, high-capacity broadband in order to complete Education, jump-start Employment and Entrepreneurship, and foster individual Empowerment and Engagement, or the E’s of Libraries™.

The simplification and streamlining measures taken up in this Order also are critically important and will immediately improve the application process for thousands of libraries and schools. Increased data transparency should mean not only better pricing that will make the program more cost-effective, but also enable faster speeds that allow libraries to serve more people with better services.

We appreciate the opportunity to engage with FCC Commissioners and staff and are pleased they adopted many of ALA’s recommendations to make substantial improvements to the E-rate program. We look forward to the next phase of the E-rate reform process to further address barriers to high-speed broadband access and ensure sufficient program funding to achieve our vision for digital inclusion and learning through libraries and schools.”

“We are pleased to see that the FCC has taken a critical first step toward bringing the E-rate program into the 21st century,” the statement read. “While today’s order is not perfect, it will help to ensure that millions of American students have access to the next-generation broadband technology they need to succeed – a core priority we encouraged the Commissioners to embrace in our bipartisan letter last month. We look forward to working with the FCC and with our colleagues on both sides of the aisle to continue efforts to modernize the E-rate program in the months and years to come.“

Reps. Ron Kind (D-WI), Suzan DelBene (D-WA), and Jared Polis (D-CO), who led the bipartisan letter to the FCC, all endorsed the above statement.

Gary Price (gprice@mediasourceinc.com) is a librarian, writer, consultant, and frequent conference speaker based in the Washington D.C. metro area. Before launching INFOdocket, Price and Shirl Kennedy were the founders and senior editors at ResourceShelf and DocuTicker for 10 years. From 2006-2009 he was Director of Online Information Services at Ask.com, and is currently a contributing editor at Search Engine Land.